Tether says it liquidated a Bitcoin loan to cryptocurrency lender Celsius

by James · July 8, 2022

Tether today announced that it has wound up a loan to the crypto loan company Celsius.

The stablecoin the issuer did not specify the dollar value of the loan, but said it was able to settle with the disputed cryptocurrency lender without incurring any losses.

“This process was carried out in a way to minimize as much as possible any impact on the markets, and in fact, once the loan was covered, Tether returned the remaining part to Celsius in accordance with the agreement. The Celsius position has been liquidated without loss to Tether , “it is stated in the company’s announcement.

Celsius, som got in trouble last month when it had to pause customer withdrawals from its platform to stabilize its liquidityhad taken out a secured loan from Tether denominated in Bitcoin. Tether so last month that it had “zero exposure to Celsius except for a small investment made by Tether shares in the company.”

Tether is the company behind the world’s largest stablecoin, USDT. It is token, which is also the most traded cryptocurrency, is believed to be the backbone of the crypto-economy. Stablecoins, commonly denominated in US dollars, are important assets for traders as they are used to enter and exit trades for other cryptocurrencies without the need for access to the USD.

Last month, rumors circulated that part of Tether’s certificate portfolio, which along with other assets repay its reserves, is “85% backed by Chinese or Asian certificates and traded at a 30% discount.” Tether denied this, and so The rumors were made to “provoke further panic to generate extra profits from an already stressed market.”

The condition of Tether’s reserves has been a hot topic for some time now. The USDT is supposed to be backed by the US dollar or equivalent, but in the past has been criticized by critics and even regulators asked what is actually held in the issuer’s reserves.

Exposure to a failing crypto company like Celsius will further raise investors’ eyebrows – especially during a bear market when a number of crypto platforms are struggling to keep their heads above water.

Celsius, which at one point handled $ 10 billion in customer funds, mismanaged how it operated its lending platform and executed “high-risk borrowed crypto-trading strategies”, only to lose $ 350 million in customer funds, according to a report from Arkham Intelligence Today.

Tether today again tried to reassure its customers, saying that they had no exposure to Celsius other than the loan, and that they “will never and never jeopardize the integrity of their reserves.”